NIGERIAN FINTECH – Cowrywise, a digital wealth management platform

By Paul Ndiho

The growing use of wealth-technology platforms is signaling a wider investment culture among young Nigerians who are increasingly looking beyond traditional models of saving. 

Nigeria’s financial system is open to the new transformations in the financial system, especially the introduction of technology.  Wealth management apps like Cowrywise which allow users to automate savings in Naira has become popular by offering savings and investment options with interest rates much higher than what traditional banks offer. Razaq Ahmed, is a Co-Founder of Cowrywise.

“Mutual funds are a solid investment vehicle to broaden that asset class mix on Cowrywise.  While this enables millennial’s to invest for the first time, the simplification of the entire process and the varieties of funds on the platform also means existing investors will find it more convenient to use Cowrywise instead of the traditional approach of investing.”

Launched in 2017, Cowrywise, a digital wealth management platform enables access to affordable investment opportunities for everyone in the marketplace, it also helps users save money and enjoy high returns from risk-free investments in Nigeria — with zero fees.

 “For example, just about 400,000 Nigerians have invested in mutual funds. The mutual fund industry assets of three years ago were only about two billion dollars and currently just about three billion dollars, which means there’s still a lot that needs to be done. So those indicators point to the fact that the market is hugely under-penetrated, and these young people are extremely undeserved when it comes to investment products.”

While wealth-tech platforms market themselves as available to all comers, their user base is mainly dominated by young professionals who are more tech savvy and trusting of the internet.  Razaq also admits younger users hold extra appeal for business.

“Currently we have more than a hundred thousand people who uses Cowrywise regularly and invested in mutual funds and our target market is to reach out to about 10 million people by 2025.”

 Cowrywise is partnering with top investment houses such as Meristem and Afrinvest to give Nigerians access to multiple mutual funds all in one app.  These mutual funds invest in companies and high-quality fixed income securities.

 “Banks have done a bit in terms of making banking services available. For example, there are about 40 million unique bank users in Nigeria. Even though we still have another 40 million Nigerians who have never stepped into the banking hall. So, there is a lot that needs to be done in terms of making financial products available to the mass market.”

 Razaq Ahmed says transactions in Nigeria are growing increasingly mobile.

“Young people are obsessed with using smartphones. So, we have about twenty million smartphones in the country currently. And they also can’t do without having access to the Internet. Right. So those three combinations make it extremely easy for us to develop our product in terms of distribution, to target those people.”

Analysts say Nigeria’s savings market is rapidly increasing and by leveraging technology, the wealth management industry could leap-frog legacy issues faced by the same industry in developed markets and possibly have a higher adoption rate than witnessed in other markets such as the United States or Europe.

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